Baxter International (BAX) Q3 2026 earnings summary

Executive summary

• Q3 continuing-operations sales were $2.976B, up 5% reported and organically, with growth across segments and U.S. and international markets.

• Adjusted diluted EPS was $0.58, down 16% YoY, primarily reflecting a higher effective tax rate versus prior-year discrete benefits.

• FY26 reported and organic sales outlooks and adjusted EPS guidance were raised; priorities remain operational consistency, balance-sheet strengthening and continuous improvement.

Financial highlights

• Q3 continuing-operations operating cash flow was $558M and free cash flow was $448M; YTD free cash flow reached $705M versus $(18)M in 9M 2025.

• Q3 GAAP net income was $294M versus a $46M loss a year earlier; continuing-operations diluted EPS was $0.57 versus $(0.10).

• Adjusted gross margin was 38.3%, down 110 bps YoY; adjusted SG&A was $637M, or 21.4% of sales, improving 80 bps.

• Adjusted operating margin was 14.5%, down 40 bps; lower pricing contribution and mix partly offset volume growth and cost actions.

• Adjusted R&D was $118M, or 4% of sales; adjusted tax rate was 18.3%, versus prior-year benefits from tax reserve releases and other discrete items.

Outlook and guidance

• FY26 reported sales growth guidance rose to 4%-5% from 3%-4%, including ~100 bps from FX and a ~$25M Vantive MSA revenue headwind; organic growth guidance increased to 3%-4% from 2%-3%.

• FY26 adjusted EPS guidance increased to $2.05-$2.15 from $1.95-$2.15; adjusted operating margin guidance remains 13%-14%.

• MPT organic sales are expected to grow low-to-mid-single digits; HST organic sales are expected to grow low single digits.

• FY26 adjusted tax rate is expected at 18.5%-19.5%, non-operating expenses at $245M-$255M and average diluted share count at ~590M.

• Q4 growth and adjusted operating margin are expected at levels similar to Q3; detailed FY27 guidance is planned for February 2027.